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Banco Bilbao Viscaya Argentaria S.A. (BBVA) - free report >>
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Banco Bilbao Viscaya Argentaria S.A. (BBVA) - free report >>
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BBVA vs. UOVEY: Which Stock Is the Better Value Option?
Investors with an interest in Banks - Foreign stocks have likely encountered both Banco Bilbao (BBVA - Free Report) and United Overseas Bank Ltd. (UOVEY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Banco Bilbao and United Overseas Bank Ltd. are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BBVA currently has a forward P/E ratio of 6.02, while UOVEY has a forward P/E of 8.41. We also note that BBVA has a PEG ratio of 0.42. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. UOVEY currently has a PEG ratio of 1.87.
Another notable valuation metric for BBVA is its P/B ratio of 0.90. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, UOVEY has a P/B of 1.03.
These are just a few of the metrics contributing to BBVA's Value grade of A and UOVEY's Value grade of C.
Both BBVA and UOVEY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BBVA is the superior value option right now.